Natural gas consumption continues to decrease

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Total U.S. natural gas consumption declined for the fifth week in a row, by 0.4 Bcf/d, or 0.7%, to 56.7 Bcf/d, despite increasing power burn. This was the second consecutive report week, and fourth out of the last five, in which power burn increased, but total consumption decreased. Particularly large power burn increases in Texas and the Southwest exceeded declines in the Southeast. However, this only partially offset a decrease in demand from the residential, commercial, and industrial sectors.

Overview:

Natural gas spot prices decreased slightly yesterday, but ended slightly higher for the report week (Wednesday, May 28, to Wednesday, June 4). The Henry Hub spot price averaged $4.57/MMBtu yesterday, an increase of 3 cents/MMBtu over last Wednesday's $4.54/MMBtu average.

At the New York Mercantile Exchange, the July 2014 contract moved into the near-month position last Thursday. It increased by 13.5 cents/MMBtu for the report week, from $4.615/MMBtu last Wednesday to $4.640/MMBtu yesterday.

Working natural gas in storage rose to 1,499 Bcf as of Friday, May 30, according to the U.S. Energy Information Administration (EIA)Weekly Natural Gas Storage Report (WNGSR). A net increase in storage of 119 billion cubic feet (Bcf) for the week resulted in storage levels 33.0% below year-ago levels and 37.4% below the 5-year average.

The Baker Hughes active rig count totaled 1,866 as of May 30, up 9 rigs from the previous week. The number of active natural gas-directed rigs increased by 1, to 326. The number of active oil-directed rigs increased by 8, to 1,536. A decline of 5 oil-directed rigs in the Williston Basin in North Dakota and Montana, which includes the Bakken Shale play, partially offset a 13-rig increase in the rest of the United States, including an increase of 4 oil-directed rigs in the Permian Basin in Texas and New Mexico. The oil-directed rig count is currently 126 greater than this week last year, and the natural gas-directed rig count is 28 less than this week last year.

The Mont Belvieu natural gas plant liquids composite price increased for the second week in a row, averaging $9.93/MMBtu for the week covering May 26 to May 30, and is 0.6% higher than the previous week's average. Spot prices for ethane, butane, and isobutane all increased for the second week in a row, by 1.1%, 1.0%, and 4.0%, respectively. The spot price of propane was relatively flat over the prior week, while the spot price for natural gasoline decreased by 0.6%.

 



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